ANALYSIS:IN RECENT years, CRH regularly returned results showing its European operations were either flat or that growth was struggling to keep up with its businesses in the US.

The Irish building materials giant always confidently predicted that Europe would come good. This finally began happening in 2006, when Europe delivered a 20 per cent increase in profits.

Last year, the combined European materials, products and distribution operations delivered 36 per cent profit growth to €1.1 billion. Of the €292 million, €178 million, that is close to two thirds, came from expansion in existing businesses - organic growth in other words - while the rest came from acquisitions.

But now it looks like the boot is on the other foot, because the US is lagging Europe. Last year, it delivered just 3 per cent growth in operating profits to €980 million, an increase of just €27 million.

In 2006, CRH's Americas businesses, which are predominantly in the US, delivered 33 per cent operating profit growth to €953 million. All in all, it's a dramatic turnaround.

The dollar's decline against the euro over the last year cost €78 million. Beyond this, the company's figures show that two of its US divisions were less profitable in 2007 than in 2006.

Its Americas materials division, which includes asphalt supplier APAC, delivered 20 per cent operating profit growth to €570 million. The actual increase came to €134 million, but a €39 million foreign exchange charge whittled this down to €95 million.

Operating profits in its Americas distribution businesses fell 32 per cent to €70 million. A €39 million fall off in existing businesses was partly set off by €15 million in profits contributed by businesses it bought in 2006 and 2007. It also had to carry a €9 million currency charge.

Similarly, profits in its Americas products division fell 9 per cent to €340 million. The €35 million slip in operating surplus was accounted for by a €17 million fall in organic growth, a €1 million slip from 2006 acquisitions and a €13 million contribution from 2007 purchases. However, a €30 million exchange charge offset this.

Growth in Europe could slow slightly this year, and the group believes that infrastructure spending and commercial building will help offset the squeeze on housing construction that has resulted from the credit crunch. Chief executive Liam O'Mahony does not see the pressure on the house market easing before the year's end, and the group has contingency plans should the other elements of the US market weaken as well.